Question
ABC Ltd. has current assets of ₹8 lakh and current
liabilities of ₹5 lakh. It wants to maintain a current ratio of 2:1. How much current liability should it reduce to meet the target, assuming current assets remain constant?Solution
To maintain 2:1 → CA = 2 × CL ⇒ 8 = 2x ⇒ CL = ₹4 lakh Present CL = ₹5 lakh ⇒ Reduction = ₹1 lakh
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